The Housing and Urban Development Corporation (Hudco) bond issue, which for the first time offered the option of bonds in the electronic form, has received nearly 1,000 applications from investors opting for this mode. This was revealed by senior registrar sources who handled the issue. The issue, which was over subscribed, received a total of 61,000 applications.
Of the 1,000 applicants, nearly 500 are from high net-worth investors (those who have applied for more than 100 bonds) and 300-odd are corporate bodies. The remaining 200 are believed to be small investors, the source added.
In an effort to popularise the concept of paperless trading, the five depository participants (DPs) HDFC Bank, IndusInd Bank, SHCL, Standard Chartered and Global Trust Bank have decided to approach the investors to open a beneficiary ownership account (BOA). Into this account the bonds will be electronically credited.
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Normally the investors have to approach the DPs to open the account. As a special measure, the National Securities Depositories (NSDL) on its part has decided to waive the transaction cost and custody charges in the case of Hudco bonds. This apart, most of the DPs have also decided not to levy any account opening charges on the investors.
The bonds are likely to be listed on the Delhi Stock Exchange and the National Stock Exchange in the first week of May. The registrars and Hudco are making all efforts to complete the preliminary work by April 30.
The NSDL, Hudco and the registrar have come to an understanding where the DPs will inform the registrar the number of investors who have opened accounts. Once the BOA has been opened the registrar shall send a form to the investor asking for BOA details and specimen signatures. After cross-checking the BOA number and verifying signatures, the registrar shall down-load the data to the NSDL, which in turn shall inform the respective DPs.
The DPs will later inform the investor that the accounts have been credited with Hudco bonds.
Apart from the 1,000 investors, the DPs will also be approaching other high net-worth investors to open BOAs.
All investors who had opted for bonds in electronic form will be getting the same by April 30. Those who fail to open an account in the stipulated time will be given bonds in the physical form. However, they will be given an option to open BOAs and dematerialise the bond at a later date.